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tv   Closing Bell With Maria Bartiromo  CNBC  January 11, 2013 4:00pm-5:00pm EST

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question as well. that's what people call net interest margin or nim, a term you hey not always hear. the stock is down 1% as a result. apple, conflicting reports. is this company coming out with a mini iphone or not? will probably learn soms some things in the coming days, weeks and months obviously and the stock is at $419, a loss of three-quarters of 1%. let's talk to peter costa, the executioner with empire execution: what are you looking for the next week? >> all about earnings, and i think that what we've seen this week relatively speaking, seen pretty good earnings. relative to what everyone was seeing. i think it's going to be a continuation of that. i also think we're going to be in a very narrow trading rake for probably the next month. >> this is a fairly lame end to the day, right? >> it's a nothing end. you know, a lot of people. there's been a lot of money made this week, a lot -- next week will say a little more. >> have a good weekend. peter costa, folks. maria is going to pick up the ball again for another hour of
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the "closing bell." have a great weekend, and we'll see you next week. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. the major averages closing at a second straight week of gains today on wall street. fractional moves to the upside. take a look at how which ear settling out for a friday afternoon on wall street. the dow jones industrial average up about 17.5 points, fractional move, 13,488. got the big banks reporting earnings next week. a little bit of buying and a handful of banks at the end of the day today. took the market off of the lows. nasdaq composite picks up about four points at the close, 3125. last trade on the nasdaq. s&p 500, close but no cigar on the standard & poor's, down just a fraction. straight to the market action. back with me once again michael pento from pento portfolio strategies and dan veru from palisades capital and michael
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from capital management and we're going to get right to it. let me ask you, michael yosikami, look all around the world for places for your money and certainly have been a bull on stocks. tell me how you see this market going into 2013. >> good year, we have europe finally stabilizing. i think that david was righteror earlier, david darst. we need earnings to get a little bit better because we'll be weak in terms of gas for this rally. just got back from asia, got back from china, singapore, philippines, the activity in asia is starting to pick up as evidenced by the year-end numbers coming out of china, so i'm fairly positive going forward into this year. we have a lot of things that seem to be going right, as long as the government doesn't screw it up. >> as long as the government doesn't screw it up. well, we do have the debt ceiling debate in about a month. when you say screw it up. >> that's what i mean. >> you mean a fight? >> a big fight. >> that's what i mean. the last thing that we need is we don't need the government in there trying to kill sentiment.
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we -- we absolutely need sending cuts. i saw you almost fell out of your chair when one of the previous guests said we don't have a spending problem in this country. we certainly need to get more fiscal restraint, but we cannot have the government holding sentiment hostage, and that really is an incredibly negative force that cannot happen this year if we're looking to have the market move forward. >> dan, let me bring you into the conversation here, the chief executive officer here. how are you allocating capital? >> doing it stock by stock. we think the market is on pretty stable ground right here, though when seagulls get together it's called a flock but when bad boons get together it's called a bad congress so that's something to worry about when you get closer to the next phase of the fiscal cliff discussion and global pmis are improving, stay pro cyclical, the again see and wyoming railroad continues to do well, tick symbol qgr, manitr oy
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s, maker of cranes, both stocks well-positioned this year. >> ben willis, in terms of the broad economic landscape, that's the fundamental underpinnings, earnings, economic growth what. are you expecting? >> i believe that the market will trend higher. right now we're at kind of a cross-currents between technical analysts pointed out yesterday suggesting a top of about 1% above us right now before we retrench. that doesn't mean we don't go g forward from a pullback on a technical basis, and as we just heard i believe if you believe that the global pmi will continue to see are improving. that tells you that the investments that we're seeing into the basic material groups, the fertilizers, et cetera, are telling you that the world economy is improving and the risk portfolio is going to be interest rate risk so it -- you'll have an opportunity to buy stocks a little bit cheaper. >> >> but i believe thiill the place to be. >> maria, also, there's the money flow issue cannot be ignored. for the first time we're starting to see equity flows.
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maybe it's the worst possible opportunity, right, because the market has already gone up 100%, but all this money that's been sitting in the cash, that's been sitting in cash, if that money gets any conviction that 2013 is going to be positive, you're going to see a flood of money coming out of 0% money market, negative 3% return when you factor in inflation. i think that will drive the equity market higher as well. >> you know, ben, you've got a great vantage point to see the flow, and i guess what i've been talking about in recent weeks is the fact that the fundamentals really haven't changed all that much. okay, yes, housing has turned. we've got $3.6 trillion on balance sheets, not necessarily moving anywhere but it's there on the sidelines, and yet this market keeps going higher because of this interest rate environment, because of the easy money from central bankers. do you still see that kind of conviction on -- on the part of big buyers? >> yes, i do, and i think as we said, the global p myois telling you that we're coming from a dismal place. if you bag back to the fiscal
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collapse that we went through worldwide, particularly i look to china, for the impact that china continues to have on the global economy. the united states is again demonstrating, may not be the growth rate that we want, but it is in fact heading in the right direction which is why the asset class of exsis should come back into favor. we've been out of favor for years at this point. the weekly money flows we just saw, the first time we've seen positive growth. >> exactly. >> i think that money has been spent quite frankly so that's a tough trade, but at this particular point market has digested what it's going to digest. put in a great first two weeks of january, and i believe the money flows should and will continue into the united states equity markets. >> right. >> and the bric nations for that nation. >> regardless of the backdrop, right, michael pento? >> that was to me. i wanted to say something. you can't ignore the booming
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money supply, mzm and growing 12% per annum, but one of the cornerstones of real and solid growth is a sound and stable currency, and when you have an idea floating out there of a $1 trillion coin that does not serve to underwrite the strength of our currency and our economy, and i finally figured out why jack lew's signature has all those loops. they are actually zeros and that's how much he's going to add to our debt. >> you don't know that for sure. we're going to have that debate on the debt ceiling in the next month. you don't think we're going to see any spending cuts? >> we have been inculcated throughout our history that they will increase the debt ceiling without ever addressing the real problem which is, correct, 100%, maria, it is spending. >> unless the market forces the hand, too, because one thing our leaders do respond to is the stock market, whereas in the early '80s it was the bond vigilantes that ruled the root i think these guys get terrified when the stock market starts
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going down because they -- you know, from the way they calibrate things, you don't have bonds to do it so now you have the stock market. >> if you get money supply growing at 12% and bonds are in the biggest bubble in the history of mankind, the money is going to go into stocks. that's the path of least resistance. >> maria, what you have to watch very carefully, you have a dance going on and you brought this up that's a very good point. the fundamentals in a lot of ways don't support the equity market moving forward as strongly as it is right now. >> right. >> but in a way it doesn't really matter because if you have all of these artificial mechanisms moving you forward, the market is going to go higher. >> right. >> so what you have to be very, very careful about is getting too far out on the risk curve. maybe you have equities but you have more conservative equities because there is going to be a point, just like someone who invested in cisco in 1997, 1998 and 1999 and it blew up in 2000, there's going to be a point where the fundamentals are just going to be what really matters. >> you just have to figure out
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when that is. >> that's exactly it. >> all right, guys. >> got the final word. >> we're still in a slow growth economy, sub 3.5% gdp growth. that bodes really well for larger companies buying smaller companies. we think the m & a story is a story that's really going to go into hyper drive this year and beyond. >> that should be exciting. m & a action. thanks so much, gentlemen. see you soon. the major averages scoring their second winning week in a row. the s&p 500 finishing a smudidg off last week's highs. >> close to the multi-year highs and pretty far from the all-time highs. take a look at this. i'll do quit math. the dow jones industrial average about 676 points away from the all-time high. the s&p 500 93 points and the nasdaq 1,923 points from the all-time high so ground to make up. sector breakdown, six positive
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and four negative. the positives led by health cares and materials, and the anythingtives, utilities down 1%. telecom down 2% for the week. when it comes to the individual movers, apollo group, the for-profit education, one of the biggest losers of the week, shares down nearly 13%. similarly j.c. penney getting another downgrade today, this time from ubs. polling shares down and also one of the biggest losers for the week, but it wasn't all negative, and it certainly wasn't all predictable. take a look at the best buy chart for the week, particularly today. the consumer electronics retailer announcing holiday sales not great but not as feared. some thinking that some of that turnaround might be starting to take shape. i don't know. we've got a ways to go on this one, too, i think, and then celgene, one of the week's biggest winners. positive news out of that company garnering some upgrades as well. maria, back to you. >> security, thanks so much. we'll take a short break and then the first full trading week of the year is in the books. much more ahead on this busy
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edition of the "closing bell." our market pros will help us prepare for the wave of market earnings next week and the flu is sweeping the country. one of the top vaccine-makers is running out of medicine. find out how sanofi is trying to combat the problem. wealthy looking for alternative income, right? alternative. they are actually turning to pawn shops. jane wells has that story from beverly hills of all places. back in a moment.
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welcome back. earnings season picks up big time next week. mary thompson joins us now to highlight what could move your money. mary, what should we watch for. >> reporter: maria, it's going to be a big week. 40 members of the s&p 500 will be reporting. specialty coatings firm ppg kicks things off on monday. we'll see if strength in the auto industry translates into profits for this firm and lennar reports and wednesday it's all
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about the benjamins and banks that handle them, goldman and jpmorgan among the bakes reporting. net interest margins for the commercials, ebay and schwab also on the docket. focus on financial continues on thursday with bank of america, citi and black rock reporting. citi's ceo first call. we'll be listening. dow components and intel report, too, along with the f-reeport damage mcmoran and schlumberger and we expect the hedge fund manager recently with the position on morgan stanley, and he could be looking to shank things up. we'll be watching that story, maria. back to you. >> thanks very much. a lot of action next week breaking down their expectations for the big names reporting next week and how the results may impact the market.
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good to have you on the program, gentlemen. thanks very much for joining us. >> good to be here, thanks, maria. >> doug, help us navigate the next several weeks. we're just getting out of the gate with earnings. what's your expectations for the fourth quarter? >> well, expectations are -- i think we're setting up for a great earnings season, so to borrow a metaphor from school, earnings season is a lot like report card season which is coming you, too, and let me tell you about the blessing of the "d" student. when you're a "d" student, you don't have to come home with as to make your parents happy. a c-plus is good enough, and i think that's what we've set up here for the first quarter. i think on average analysts are expecting 3% revenue growth and 3% earnings growth for the first quarter. that's barely the rate of inflation, so you essentially get the grade that you get from signing your name on the s.a.t. that's all people expect. i think companies will do better than that, and i don't think they have to knock the cover off the ball to get people excited. >> c-plus, but this market is up big. you think this market is
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expecting a c-plus? >> you look at estimates. i mean, you look at what analysts are expecting. >> is it going to be a disappointment which is really what i'm getting at. you think -- >> i think it will be really tough. i think it's going to be tough for these things to disappoint. when you're expecting only 3% growth, a company barely has to show up to do better than that and i also think companies will get a pass on the fourth quarter because the fourth quarter, we had an election, the fiscal cliff and i think -- >> don't forget hurricane sandy. >> yeah, so you can say, hey, orders were a little bit slow but we're starting to see them pick up and every investor will go, yeah, that sounds about right and i think they will give them a pass. low expectations and the pass for the quarter. i think it will be a good quarter. >> rob, let's talk technical. i love technical strategy. how do you charts look to you based on the commentary you just heard on the fundamental side of it? >> maria, it lines up fairly well. if you look at where the weekly indicators are, they tend to track the one to two-quarter shifts and they are still building positively.
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our view is as you get into the latter part of the first quarter, the market is probably setting up for a more serious correction as you get into q2. one of the things that we're looking at is this rotation that's going on in the market. i think that's really the critical point to be focused on for investors and for viewers out there, and that is this rotation of the global growth themes and global growth cyclicals, all of which or many of which have been in 18 to 24-month bear markets and reversing to the upside and the point earlier where stocks have had a pretty good run, put it in the context of some of the longer term data the global growth cyclicals still look like they have more room. schlumberger is reporting at the end of next week, a perfect example of a stock in a two-year bear market roughly and expectations are really low and intel is another example and i think those types of names still have the potential to move higher almost regardless of what the earnings are, that's almost a flippant statement. the other side is all of the bond proxies and consumer names with huge runs over the last
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three years, look like there's a lot more risk so there's really a call of where investors are focussed in terms of the themes in the market. >> yeah, that's a really good analysis. ge, you think the expectations are low. intel. what about the banks? >> that's kind of a mixed picture. if you look at the s&p financial index, it's really up into a lot of resistance so i'm more neutral on many of the banks at these levels. >> doug? >> i was going to say this is exactly where i think investment decisions are made which is when you get the momentum showing you that, you know, the fundamentals look decent and the momentum is confirming you're on the right track, i mean what, john said is exactly kind of what we're seeing, too, which is global stuff looks great. the cyclicals look great and the safe plays where people have hidden for the last couple of years and the utilities, consumer staples, they look tired and i think we know they are expensive from the fundamental perspective, so it's a great blend and i think, you know, hearing the two of us, you know, should convince some folks that the market isn't going to go down. >> not going to go down because
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of all the money sloshing away, and you think things are getting better. what about the whole fiscal debate, the debt ceiling debate that we're no doubt going to see back and forth over spending cuts? >> well, i think the i keep telling investors, you know, when the clouds clear off the horizon, and we have no more clouds, you're not going to have the s&p at 1450, right, so the reason the s&p is at 1450, and by our measure is roughly 15% to 20% below where it should be, that's because there are clouds on the horizon. so you can't wait for all the clouds to clear. i think, you know, in the end the debt ceiling is resolved like the fiscal cliff is resolved. it's messy. it's late, but in the end we get through it. >> robert, real quick here. final question. one chart that sticks out in your mind that looks particularly compelling from a technical standpoint that's going higher. what would it be? stick your neck out for us? >> you know what? i think it's a contrarian call. we've been talking about the energy space and gotten tremendous pubback from many clients on the interest there, but it's generally one of the
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last cyclical areas investors rotate into. there's opportunity here between now and going into the middle of q2. >> we'll watch energy. thank you for that. make us some money. guys, thank you very much. see you soon. have a good weekend. >> appreciate that. >> notable ipos on next week's agenda as well and bob pisani has the lowdown on that angle. hey, bob. >> quiet recently, but next week we'll get a brand name. take a look at this, norwegian cruise lines, believe it or not, third biggest cruise operator in neckor america, going to be a $400 million deal. this will be a nice one to watch. it will be in the middle of next week. a lot of interest in master limited partnerships. three of them coming next week. they are back by physical assets that generate revenue. in fact, very nice dividend yields. take a look. sun coke energy, 8.25% yield here. next one here, take a look at cvr refining, petroleum refining operations in kansas and
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oklahoma. 18.8% yield. good heavens. finally here, usa compression partners here. this one owns natural gas compression services in the u.s. 8.5% yield. little wonder why people are pretty frantic for these master limited partnerships. maria, back to you. >> thank you so much. 'tis the season to be sick? with the flu reaching epidemic proportions and vaccine supplies strained, i'll talk with a top sanofi executive overseeing immunizations. keep it right here because sanofi is the largest supplier of the flu vaccine. also ahead why the agriculture's latest report could hit your wallet when you go food shopping. now we're worried about crops. stay with us. what are you doing? nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go...
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. welcome back. a flu epidemic is sweeping the country and the unanticipated demand for fluke vaccines is now leading to a shortage of supplies among drug-makers, including sanofi, the biggest flu vaccine provider in the country. we spoke with the ceo earlier in the week, and since then sanofi has already sold out half of six different dosages of the popular flu zone vaccine. so how worried should we be about the dwindling supplies? we bring in right now phil hospach, vice president of innovation policy at sanofi. good to have you on the program. thanks so much for joining us. >> great to be here on behalf of all the employees of sanofi's vaccine division. >> exactly and spoke with the head of your company earlier in the week as i mentioned.
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very articulate on really the need for this supply. how would you characterize the epidem epidemic? what's different this year compared to past years? >> an elevation in influenza activity and an important reminder to remember how serious influenza disease can be. the vaccine strains are a good match for what strains are circulating today in the united states. also, there is vaccine available in the community. it may be a little more difficult to find, but if you're a patient and able to talk to your doctor and pharmacist, you'll be able to find a vaccine out there. sanofi has vaccine still available for sale today. >> you say there's still supplies out there. i'm glad to hear you say you still have the flu vaccine there available today, but is it too late now to get vaccinated? i mean, what should folks be doing? >> it's never too late to be vaccinated. in fact, being vaccinated is the best way to prevent influnza. if you haven't gotten the influenza and influenza is in your community, you should seek
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out the vaccine immediately. >> yeah, but the problem, sometimes i -- sometimes, i mean, personally, i feel like i get the flu shot and feel like i get the flu, feel like i get sick right after i get the shot and that's why i stopped getting the shot. >> that's really a myth. the vaccine cannot get the flu. >> you feel sick and you get the symptoms after you get the shot. >> don't get flu symptoms after you get the shot. the shot does take one to two weeks to allow you to generate appropriate antibodies and during that time period you might be at risk for getting the flu. >> you want to get the flu shot when you're strong and healthy. >> that's correct. >> and that's why we actually designed one of our new vaccine, high-dose vaccine for those 65-plus. those who have weakened immune systems, this new vaccine actually provides a better immune response, better antibody response for those 65 years of age or over. >> will sanofi be making any more doses of the flu vaks even
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in addition to the 60 million you've already produced, or are you done for the year? >> already produced all the vaccines for the year. this is based upon orders in the first half of the year and we always make more vaccine than typically order. that's why we still have vaccine today. >> are you worried about how quickly this flu is spreading? are you surprised? >> you know, we're overdue for a flu to actually be on the rise. been very fortunate over the last few years, again, i think it's an important reminder to everyone just how serious the flu is and how important it is to be vaccinated. the cdc recommends that everyone in the u.s. receive a flu vaccine annually. >> how come there are headlines out there, in fact a headline today that says the flu shot is 62% effective. >> well, again, the flu vaccine is our best prevention against influnz a. 62% is not unanticipated. that's again -- that's preventing doctors' visits due to the flu. in fact there's evidence in the past that shows you may be having greater protection against further complications like hospitalizations or even death.
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>> so you're saying that, yes, this is -- it may just be 62% effective, but the fact is this is the best way that there is out there that exists of not getting the flu. >> that's correct. that's what we have today, and it's a very effective in preventing the flu and even gives you the opportunity to have a milder type of disease. >> and you're already looking ahead to next year's supplies, right? will sanofi be producing more vaccines than normal to prevent shortages? >> well, you know, what's very interesting right now is we are in the process of producing vaccine for the next flu season, and we anticipate because of this year's demand, because of, again, the media attention and also the higher incidence of disease, that more of our physician customers and more of the public will be seeking flu vaccine next year so we expect we'll be making more. >> and you'll be making more. let me ask you. are there areas of the country or certain demographics that you can point to to tell us or inform us as far as where the flu is really the hardest hit? >> welly, you know, we rely on
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the cdc for that type of epidemiology and send everybody to the cdc to look at the website to see where the flu activity is. >> first signs of the flu, what should folks do? >> first signs of the flu -- >> at that point it's too late for a flu shot. >> too late for a flu shot. >> what should you do? >> stay at home, take care of yourself and try to prevent further spread of the disease. >> good to have you on the program. thanks very much. >> thank you very much. >> see you soon. >> take care. >> get your wallets ready for higher food prices. we'll explain what's driving that part of the story higher and from beverly hills to new york city. pawn shops going upscale in pawn shops across the country and so are the spending. >> $2 trillion in health care spending without making any spending cuts. it's possible and this doctor will share his plan. back in a minute. sit tight. ♪ reach one customer at a time?
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welcome back. shrinking wheat and corn supplies could be hitting everybody in the wallet. sharon epperson at the nymex with the latest development. sharon, over to you. >> reporter: maria, after that devastating drought the crop conditions for corn, for wheat are worse than we even expected.
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the usda out with its report today, and that helped to send corn futures to a three-week high after they said that actually farmers produced less than three-quarters of what was anticipated for the spring and significantly reduced what they believe has come out of the 2012 harvest. keep in mind as well strong demand is likely to continue to drain supplies, and that's going to keep prices up well into the summer, they say. we're also looking at a similar situation with wheat. wheat rose to a one-week high today, and we're looking at dismal prospects for the spring and for the summer crops for wheat. now a far different story for soybean. actually we did see a slight increase there from what they were expecting and only modestly though, and that is something that has helped soybeans fall to a six-month low. back to you. >> all right, sharon, thank you. >> how will rising commodities prices impact your portfolio. take a look now at food sector. aaron lash is with us from morningstar telling us which food brands are ready for the uptick in costs and those names to keep on hold and joins me
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right now. good to see you, erin, thanks for joining us. >> hanks for having me. >> you're expecting to see commodities in food prices higher this year, correct? >> we expect that costs will be higher. packaged food companies tend to hedge their exposure to commodity costs, and as a result increases that we were seeing even last summer haven't necessarily flown through the income statements of several of these companies. >> and how is that going to impact food companies, like a general mills, for example? >> well, general mills has significant exposure or has exposure to grains, but they also maintain exposure to several other commodities. the company talks about the fact that grains only make up about 5% to 10% of their overall commodity cost exposure so as a result, you know, even though grains have been going up, other commodities have been coming down and so this year they expect more modest inflation, more 2% to 3% type inflation versus the 10% that they experienced last year which was the highest level that they had seen in more than three decades. >> and you're cautious on
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companies like kelloggs, general mills and even campbell's soup. why is that? >> several factors at play. commodity costs continue to be a challenge. consumers are maintaining a tight grip on their purse strings, and right-hand spending as much as in the past so passing through or offsetting some of these higher commodity costs with higher prices at the shelf can be a challenge, and private label competition is also fierce, so not only are they facing competition from other branded players, but they have lower priced private label brands and products that are challenging them as well. >> who is best positioned in the food space? >> from our perspective the most attractively priced from a valuation perspective name would be kraft foods. we think that kraft, now that it's been spun off from the global snacks business, represents an opportunity. their portfolio includes several mature brands, but they are investing in them now where they hadn't been in the past. for instance, kraft mayo, the
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advertising investment behind that brand had been increased by about 50% and the company subsequently realized more than a 9% increase in sales this that product and for mayonnaise which is a mature category, that's pretty impressive, and we think that that kind of growth can be -- they can realize those types of growth across its portfolio. >> so this is not just a food inflation story, but it's also an end market demand story? >> yeah. obviously consumers are, you know, paying attention to what they are buying. they are not overspending. if they are going to pay up for something, they want to see the value that they are getting from that product. >> all right. we'll leave it there. good to talk with you. thanks so much. >> thank you. >> we appreciate your time tonight. >> up next, is there a doctor in the house to cure our spending addiction? i'll talk with one after the break who says he has a plan that could save us $2 trillion in health care wait until you hear how the former obama advisers say we can do it. also ahead.
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humira is clinically proven to help relieve pain and stop joint damage. so you can treat more than just the pain. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. ask your rheumatologist about humira, to help relieve pain and stop further joint damage before they stop you. welcome back. breaking news right now. software pioneer john mcafee the
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bizarre story could be headed to hollywood. robert franks is here with the details. >> reporter: we all said this could be a movie and now it will be. the story was purchased by warner brothers which is now going to make a movie on this. they have chosen the team behind "crazy stupid love" to write and direct this movie. it wasn't john mcafee who sold the rights, we're told. it was basically the article by joshua davis in "wired" magazine that was purchased for the life story, so it's possible we could have two movies, one by joshua davis and one, of course, john mcafee himself who is out there, we're told, trying to also sell his life story for a buck and a movie. no word on who would play him. i think robert downey jr. would be good for one of them. >> like this a lot. when is this expected to hit then? >> no schedule yet. these things take a couple of years, though they are now speeding them up. my question is also there's no ending for this move yet. we don't know whether he had
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anything to do with this murder. we don't know what he's going to do, so i guess they are assuming that there will be an ending between now and the time this movie is made. >> that's a really good point because we don't know where this goes, and isn't that going to dictate how you portray this character, although he's already pretty, you know -- there's a picture and a perception of mcafee already out there. >> you've got the crazy life part. >> yeah. >> how do you depict the murder? no idea whether he was involved at all and if he wasn't, what is the story? so without knowing anything about his involvement or look thereof in the murder and where this investigation goes, it's really tough to have an ending for this one. >> interesting. all right, robert. look for that. thanks so much. robert franks. >> his plan to overhaul the health care system will save $2 trillion for the united states over the next ten years and that is without cuts. we just know how to do it. is that really possible in business? dr. david bloomenthal is
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president of the health care fund, a former harvard medical school professor an an adviser to president obama on medical information technology. good to have you on the program, dr. bloomenthal, thanks for joining us. >> thank you, maria. >> $1 trillion a lot of money. what are the recommendations? >> a report by the commonwealth system, a group of experts, very broad-based, put out a report this week that put out a bunch of common sense ideas to get us out of the partisan wrangling over taking things away from people and focusing on making the health care system function better. you're correct. we think we could save $2 trillion. 1 trillion to the federal government, over 5 hundred billion over ten years to households and another 190 billion to employers, and there are a couple of key parts to the plan. the first is to start by setting a goal for health care spending for the country as a whole, that spending on health care should go up no faster than the gross
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domestic product, 18%, which we spend now of our gross domestic product is enough. we can live with that, and let it grow with gross domestic product, and then there are three pillar has would get us to that goal. the first is to pay smarter. we should pay providers of care fairly but should pay them horif they do better, reward their performance. if their performance is good, reward their participation in proven high-performance health systems. the second thing we need to do in that same area is to make the family physician, the family primary care physician and caretaker the center of the health care system. the second is to get the consumer involved, to reward them if they make smart high performance choices. a third is to make the market function better. there we focus on administrative waste. we spend about 14% of our health care dollar on administration. that's way too high. it's about $360 billion a year. we think that could be dramatically cut by making
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markets work better. >> why do you think these things have not been implemented so far? mean, with all due respect. many of these things seem quite obvious and seem tonight issues that we've been talking about for the last several years, for example, you know, do away with waste. i mean, yeah, and -- and make the patient in control and take some accountability. how come this stuff is not implemented? >> a lot of these ideas are in experimental form in obama care affordable care act. they have not been pushed fast enough or hard enough. we need to do these things on an industrial scale. we need to not just put our toe in the water but to push them through. the administrative waste reduction is included in the obama care, but it's -- the implementation is extended, and it's not getting the attention or the push that it really deserves. >> now, a lot of people say that you know what's happening in health care right now is really
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changing a number of doctors' enthusiasm, willingness to be part of certainly medicare plans, be part of -- they feel that they are not getting paid the way they were. is there a downside there that some top doctors are no longer part of the system? >> well, our plan would actually pay physicians under medicare at 20 20122013 rates, get rid of some of the rates threatened under some of the proposals and freeze them at 20122013 rate and freeze them if physicians participated in high performance health systems or if they performed better than average in terms of quality and efficiency of care. so basically pay them fairly. stop the threats to reducing their fees, but then reward them when they perform well. >> how -- how are you going to police that, that they are performing well? i mean, i understand doing away
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with some of the expensive, wasteful testing that may or may not be necessary. but who is going to say, well, this wasn't necessary. how do you police that, that they are actually doing well? >> well, we've got a much more robust set of quality measures now than we ever had before. we also have lots of physician groups coming together, identifying types of care that aren't effective, and acknowledging that they shouldn't be providing that kind of care, so we need to put in place the data collection systems using health information technology, electronic health records, collect that data, monitor performance and feed it back to the nation's physicians and hospitals and nurses, and also make it available to payers. >> look, i realize very few people want to touch medicare, and your plans are, you know, looking to raise money without putting any harsh cuts so that it's not on the backs of
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seniors, but, you know, given the fact that the medicare program hasn't changed since its inception basically, hasn't really been maybe tinkering here and there but hasn't changed at all in a fundamental way, not even the eligibility age, even though we're living longer as americans and the demographics of this country are much different than when this plan was formed, why are we so afraid to touch medicare? shouldn't it be changed? shouldn't it be cut? >> we actually do believe it should be changed and in ways that would reduce its inefficiency. so one of the proposals that we're making is to make available to seniors another choice in medicare which would make it like the employer-based plans that it was intended to be like, but medicare has become a fragmented inefficient plan with many different pieces. there's a part "a ", a part "b" and part "c" and part "d" each with huge administrative costs.
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we would propose having one alternative, medicare , th would combine all those parts and reduce a lot of the administrative waste in the process. >> all right. we'll believe it there. doctor, good to have you on the program. thanks so much. >> thanks for having me. >> up next, is research in motion turning into a rebound stock? the blackberry-maker among the companies buying eastman kodak's patents. the latest on rimm and then pawn shops ain't what they used to be. targeting more affluent customers. it's paying off for everybody, including investors. jane wells with the story next. at 1:45, the aflac duck was brought in
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with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac, but i doubt he'll be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a get-well card at
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welcome back. who knew that shares of pawnshops have climbed 10% in the last two months alone. 10%. jane wells has been checking out a popular pawnshop that is doing so well, it is expanding to new york. >> yes, after 75 years in beverly hills where they have seen it all, one thing is that wealthy clients are pawning gold and sometimes gold bars they bought in the recession. >> people are investing in actual gold and the nice thing is that with actual gold you can bring it here and walk out with cash in minutes. you can't do the same in the
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bank. >> the national pawnshop growth says there is growth where clients who need cash and can't get a loan or maybe the credit has taken a hit. what do you get for the jouewel? one half? one-third? >> here is the most important question i would ask, how much are you looking to b ing ting t the reason why is because i don't want my customers borrowing more than they need to. >> they are are fair. also, they don't want to put you in a position where you can't redeem it, but there is enough room when they take something in that they, you know, don't take too much, because they want the people to come back to redeem it and they will have other business. >> yeah, i sometimes think that you can get about half is what i finally learned. at the the loans are four months in california and 4% interest and rolled over, and maria, as you mentioned, three large is stocks in the sector, and cash america, and ezcorp and first cash financial, and jeffrey has
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a buy on the last, because jefferies does like what is happening with gold. >> interest, jane. thank you, jane wells. >> new day for research in motion, the stock closed 14% higher after they said they would carry the blackberry 10 and that means that rim has locked down all four u.s. major carriers, so can rim save the troubled name? we are talking about rim with the manager of the volatility group, and a member of the actions trading group. >> we saw heavy calling activity to the upside here and the stock continued throughout the day. some people thought that there were picture releases of what the blackberry 10 would look like, and that pushed it higher, but it is the major picture they are picking up plaque berri 10 and normally you sell a call against the stock to give yourself some downside protection and take some income in, but the call sellers were
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selling all of the way out to january to the $25 strike and not willing to be called away until they see the stock doubling and we have seen it double in the last month, and maybe doubling again and the last time that happened was february 2010 and maybe some upside of the traders believing in the stock. >> what about the rim stock right here, and would you buy it even though we have seen a big move. >> well, maria, an interesting situation with $3 billion of cash on the books and to market the bb10 and this got me thinking that i want to be in the stock here and play it for the fast money trade and get out before the january 30th deadline when the bb-10 is going to be released. i am looking for that timetable and playing to the the short side. >> thank you, brian. for more "options inside" stay tuned for "options action" right after the "closing bell." coming up my thoughts on the higher social security taxes kick i kicking in for every american and why all of the complaining
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and it, and it could be a sign for where america is headed. back in a moment. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ametrade.
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introducing the all-new 2013 lexus ls f sport. i've always had to keep my eye on her... but, i didn't always watch out for myself. with so much noise about health care... i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile. not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still going to give me a heart attack. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare. and finally today, my observation on the impact of the little talked about fica tax
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otherwise known as the payroll tax which hit everybody who got paid this week. this is the tax that funds social security which is a wildly popular entitlement for good reason. it helps a lot of people. everybody wants it, but based on the reaction to this tax hike which really was simply returning to the tax rate from two years ago, very few people actually want to pay for it. this is important, because the entire tax conversation has centered on the highest earners and the so-called rich seeing the capital gains taxes going higher, but the payroll tax which was quietly pushed back to 6.2% from 4.2%. remember it was pushed down the 4.2 to help stimulate a faltering economy, and of course it was only supposed to be one year, but it was pushed ahead another year in light of the presidential election. and this is hitting people hard


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